Oil trades

Taking some profits out of /cl and freeing up margin.

60 DTE 58/91 strangle BTC for 0.25. Had been sold for 0.42 but I rolled the put side down costing 900 so profit was $150 in less than 2 weeks.

30 DTE 60/84.5 stragles BTC for 0.18 sold for 0.22.

So made back my losses earlier in the year and am now + on /CL for the year by $200. Hey at least it is positive.

But here is something to think about. I re-read sections of the option sellers book, they mostly focus on selling futures options and they had 56% returns last year verified. Most years they do 40-50% and a lot less trading than most of us. They like to start ladders 90 DTE and each month add new rung.

The premiums are huge on futures. The issue is not a lot of weeklies and harder to roll. But looking at oil today the 93 DTE 58/87 or roughly delta 7-8 options. Can be sold today for 0.72 credit. Oil is $10 per 1c move per contract. So a 10 lot is $100 per 1 cent move.

Anyway at 60 DTE it has already decayed to 0.50-0.53 by 60 and 0.12 at 30 DTE. So the largest drop occurs from 60 to 30 days but the drop from 90 to 60 days is not chump change. Also can be farther OTM which usually requires less adjusting. So a 10 lot would bring in $7200 cash minus commisions and could buy it back roughly 28 days later for $5300.

At 60 days the options are roughly delta 5s and by 30 they are down to 2.

I am starting to look at this again but only for regular accounts with margin. Will not let you touch futures options in IRA etc.

I may put a 1-2 lot on /CL 93 DTE today just to watch it happen in real time.